December 21, 2004

I usually don't like to do predictions because, as an optimist, they end up being just a wish list. But finally some things on my wish list might come true .... so without further a due ... Scott Knowles' 2005 Predictions:

First and foremost, 2005 will be known as the year of the long tail.The efficiency found in the 80/20 rule will no longer be necessary and old, traditional industries will struggle to adopt.As Chris Anderson puts it, 99% of the market can act efficiently as a marketplace because scarcity doesn’t exist in the digital realm.This applies to everything from music distribution to Aunt Nelly’s frilly fabrics to how we manage the radio spectrum.The long tail embodies the the concept of micro markets.Peers reaching peers.No control of the masses, but by the masses. Chris has more in Wired and on his new blog supporting a book he is writing on the subject:

To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks.

Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero - either they don't carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store.

The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it's just a few people a month, somewhere in the country.

This is the Long Tail.

Bloggers will become woven into newspaper content: A major print newspaper will fully integrate reader generated blogs into its content either via the offering of branded blogs or integrating outside blogs by correlating content between the two sites.As a side note, when my employment was a little less certain a few years ago, I was tooling around some business plan ideas that would involve this.I had visions of pitching Washington Post execs this concept and them wondering even what a blog was at the time.Now it’s obvious. Lemonde was the first to do something similar.

Only a few social networking sites will exist as a destination, and social networking will shift to be primarily a tool that’s layered across myriad aspects of the web.Foafnet will be the killer app of 2005. Meanwhile big media players keep buying up social networking sites but miss the importance of Foaf.

Web Services will enable the customized aggregation to be integrated into search (think i-local meets Technorati.).

Local Search becomes easy for local businesses through bid management companies like Local Launch and Reach Local and the hockey stick gets started.

The music longtail becomes more enriched through Podcasting, which spreads beyond tech talk and sees the return of the DJ (or shall I say podjay). Traditional media tinkers with distributing content via podcasting but doesn't integrate user created podcasts into its own content (save that for 2006 or 2007).

Out of fear of losing its power, the FCC settles with Fox over its indecent indecency fine and the Courts do not get to limit the self proscribed power of of the FCC.

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The U.S. Government is the nation's largest provider of financial assistance to women & minority owned small businesses. The U.S. Small Business Administration (SBA) is Congressionally mandated to assist the nation’s small businesses in meeting their financing needs. The SBA has small business loan programs and services to meet most small business needs. More information on U.S. Government Small Business Loans can be found at **www.SBASmallBusinessLoans.com**

How do Government SBA Small Business Loans work?

When a small business owner applies to a lending institution for a business loan, the lender reviews the application and decides if it merits a busiuness loan or if it requires an SBA guaranty. SBA backing on the business loan is then requested by the lender. In guaranteeing the business loan, the SBA assures the lender that, in the event the borrower does not repay the loan, the government will reimburse the lender for its loss. By providing this guaranty, the Small Business Administration helps tens of thousands of small business owners get financing they would not otherwise obtain.

How much money can I borrow?

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7(a) Loan Guaranty Program

The 7(a) Loan Guaranty Program is the SBA's primary small business loan program. A maximum loan amount of $2 million has been established for 7(a) business loans.

Low Documentation Loan (SBALowDoc)

SBALowDoc is the SBA’s quick and easy program that provides a guaranty on small business loans of $150,000 or less. Once you have met your lender’s requirements for credit, the lender may request an SBALowDoc guaranty for up to 85 percent of the loan amount. You complete the front of a one-page SBA application, and the lender completes the back. At SBALowDoc centers, the agency processes completed applications within 36 hours.

SBAExpress

This method makes it easier and faster for lenders to provide small business loans of $250,000 or less. The SBA provides a rapid response through its PLP processing center in Sacramento, Calif.— within 36 hours of receiving the complete application package. Lenders use their own procedures to approve and service the loans.

CommunityExpress

The CommunityExpress pilot program is designed to spur economic development and job creation in untapped rural and inner city communities by providing loans and technical assistance. Loan proceeds may be used for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory or real-estate acquisitions.To be eligible for CommunityExpress, current or prospective small businesses must be located in low- and moderate-income urban and rural areas.

While CommunityExpress is similar to SBAExpress, here are some differences:

• CommunityExpress lenders, together with the National Community Reinvestment Coalition, provide hands-on technical training and support, both before and after loan closings, through community-based, nonprofit NCRC member organizations.

7(m) Microloan Program

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How do I get started?

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A Blog by Scott Knowles

neXtknode covers what's next in digital, local and social. It is produced by Scott Knowles, who has over 13 years experience in New Media, and most recently worked at AOL building businesses and products in the local, verticals and search space.